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Abu Dhabi, UAEThursday 15 November 2018

Saudi and Kuwait move to support Iraq amid protests over electricity crisis

A new energy deal may be under way as Iraqi officials plan to head to Riyadh for talks

Iraqi riot forces stand guard as protesters demonstrate at Al Tahrir Square in central Baghdad, Iraq, on July 20, 2018. EPA
Iraqi riot forces stand guard as protesters demonstrate at Al Tahrir Square in central Baghdad, Iraq, on July 20, 2018. EPA

Iraqi officials plan to travel to Riyadh to strike an energy deal with Saudi Arabia as protests over electricity cuts reach Baghdad.

This came after Iran severed its electricity supply to Iraq’s southern provinces of Ziqar and Meysan last month, saying Iraq had failed to pay its mounting debt to Tehran.

Saudi Arabia and Kuwait are now looking to fill the void left by Iran’s move.

Kuwait, on Saturday, also announced it would send 30,000 cubic meters of diesel to Iraq to help with electricity generation in the south. The first shipment was said to have been delivered on Saturday.

The unrest presents a potentially unique opportunity for the Saudis, who seek to curb Iranian influence in Iraq and potentially cut them off from supply routes reaching Syria, where Iran has propped up Tehran-leaning rebels.

More than 75 per cent of Iraq’s accessible oil reserves are found in the country's southern provinces.

Gulf countries over the last year have made a push to improve relations with Iraq as part of their policy to counter Iran’s perceived meddling in Arab affairs.

Iran over the weekend threatened to block oil exports in the Gulf if moves were put into place to bar Iran from exporting fossil fuels.

The US is imposing sanctions on Iran in an attempt to bar it from exporting oil.

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Earlier in June, US Secretary of State Mike Pompeo made Iran a priority during meetings with the Saudi Foreign Minister Adel Al Jubeir and Iraq Prime Minister Haidar Al Abadi.

Saudi intervened in Yemen's civil war after the internationally recognised government said Iran had been providing arms to the Houthi rebels, who seized Yemen’s capital in 2015.

As for Kuwait, ensuring the safety of its northern border is paramount to the country, which plans on building a new commercial centre, Silk City in Subiya, less than an hour’s drive from the Iraqi border.

Kuwait is willing to bolster the economy of Iraq, and in particular Basra, to quell the possibility of protests spilling over the relatively insecure border. Kuwait fears the unrest in Basra, which is less than two hours’ drive from Kuwait city, could pose a security threat.

Kuwait is less aggressive in its policies towards Iran when compared to its other Gulf neighbours.

Although Kuwait does not endorse many of Iran’s policies, some in the country fear that an economic failure in Iran could ripple through the other Gulf countries.

Al Shall, an economic consultancy and risk assessment firm in Kuwait, wrote: “We do not believe that it is in the interest of the region, particularly Kuwait, for the poor conditions there to continue, neither in humanitarian terms nor in security terms.”

Stuck between regional powers, Kuwait’s security depends on peaceful relations between Iran, Saudi Arabia and the political stability of Iraq, which has traditionally insulated Kuwait from Iranian influence.

Kuwait last year pledged $2 billion (Dh7.4bn) to the reconstruction of Iraq in a conference hosted in Kuwait City that saw dozens of countries attend to pledge a total of $30 billion.

The pledge came as a surprise as Iraq is also set to resume payments to fully meet the $4.6 billion still owed to Kuwait in reparations for the destruction of oil production during the Gulf War.